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'petrol Prices Fuel Inflation Rise' - Cpi, Oops

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Petrol prices fuel inflation rise

Transport prices drove UK consumer price inflation (CPI) to 2.3% in July from 2% in June, Office for National Statistics (ONS) figures show.

Opps, even the rigged inflation figures are going pear shaped, remember unlike the RPI the CPI doesn't include pesky things like mortgage costs or council tax, but a basket of goods mainly consisting of DVD players :unsure:

The BoE may be independent but it just so happens that Gordon Brown is able to choose who sits on the MPC and he also sets the target and yardstick by which they measure by, so lots of independence going on there then with maximum cover-your-**** factor when things go wrong (and they're bound to go wrong at some point).

Gordon Brown changed from the RPI to CPI back in Dec 2003, up until about a year ago inflation was running at 1% :blink:

The main objective of this was to prevent the BoE raising rates into 2004 when it should have done and when the Fed was making moves, imagine 5%+ rates when going into a general election along with a stagnant housing market?


Hrm, well, at least it worked for a while then and achieved its aim, iit put off the day until after the election, it can only make the correction all the worse though.

Between 1986 and 1988, consumer spending increased at an average rate of 6 1/2  per cent a year, and the saving ratio fell to 6 per cent in 1988. The housing market boomed - prices increased by around 90 per cent between 1986 and 1989 - and many homeowners borrowed for consumption on the back of rising house prices. With falling saving and a sharp increase in housing investment, the personal sector moved into financial deficit in the late 1980s for the first sustained period since the 1950s.

The subsequent recession and housing market downturn left the personal sector with a high debt burden and many homeowners with negative equity (the value of the mortgage outstanding exceeding the market value of the property). Consumers' expenditure fell by 3 1/2  per cent from peak to trough and house prices fell on average by almost 13 per cent

G.B. - 1997

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It really is the perfect storm. With inflation getting ready to rocket up these morons will now be stuck between a rock and a hard place.

Do they keep inflation tame, yet kill housing and strike a blow to the economy? Or do they let inflation rage and increase the already scary housing bubble? Take your pick. Either way the result is going to be very ugly.

These morons screwed the pooch this time.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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